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Decision Usefulness and Accelerated Filing Deadlines



    1. Jon M. Huntsman School of Business, Utah State University
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    1. Robert Day School of Economics and Finance, Claremont McKenna College. We would also like to acknowledge the contributions of an anonymous referee, Vicki Dickinson, Rachel Hayes, Sarah McVay, Marlene Plumlee, Scott Schaeffer, and workshop participants at the University of Utah and Utah State University.
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In this study we examine the impact of the Securities and Exchange Commission's (SEC) decision to accelerate the filing of 10-Ks. The SEC argued that the accelerated deadline would increase the relevance of the disclosures, making the reports more useful. Opponents countered that the accelerated deadline would decrease the representational faithfulness of the disclosures, especially for smaller firms. We document a significant decrease in the 10-K market reaction for smaller firms as they accelerate from 90 to 75 days. For larger firms we find no significant change in the market reaction from 90 to 75 days. However, as these larger firms accelerate their 10-K deadline to 60 days, we find a significant increase in the market reaction. We also examine changes in reporting quality, shifts in information content, and changes in 10-K filing order and clustering and find results that are consistent with accelerated filing having significant impacts on representational faithfulness and relevance.